What this means, said Conference Board economist Ken Goldstein, is that recovery is firmly underway in the U.S. economy. However, he added, "the road ahead is far from smooth, with sluggish profits and weak export demand restraining growth. Still, growth is apparent in many key sectors. Consumer spending, representing two-thirds of all economic activity, is being bolstered by steady income gains and improving confidence."
The Conference Board reports that the coincident index rose 0.2 percent, and the lagging index fell 0.3 percent in February.
Even with a flat month-to-month growth in February, the leading index is up 2.4 percent from its value six months ago in August 2001 and up 3.1 percent from its value a year ago.
The modest gains in the coincident index appear to be gaining momentum. Should this trend continue, the trough of the recession would most likely be November 2001, making the most recent economic contraction very short and certainly the mildest in U.S. history.
The coincident-to-lagging ratio, which has historically led business cycles, is up for the fifth consecutive month in February. This is another signal that an economic recovery is underway.
The leading index now stands at 112.4 (1996=100). Based on revised data, this index increased 0.8 percent in January and increased 1.3 percent in December. During the six-month span through February, the leading index increased 2.4 percent, with seven of the ten components advancing (diffusion index, six-month span equals 75 percent).
With the increase in February, the coincident index now stands at 115.6 (1996=100). This index held steady in January and increased 0.1 percent in December. During the six-month period through February, the coincident index decreased 0.4 percent.
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